Merryn Talks Money – UK Budget Special: What Will It Cost You?

Podcast Host: Merryn Somerset Webb (Bloomberg)
Date: November 27, 2025

Episode Overview

This post-Budget live special of Merryn Talks Money brings together a distinguished panel — Stephanie Flanders (Bloomberg’s Head of Government & Economics), Helen Thomas (CEO, BlondeMoney), and John Stepek (Money Distilled newsletter) — to dissect the UK government’s latest Budget. The discussion goes beyond headlines to explore market reactions, fiscal risks, who wins and loses, and what the future holds for savers, taxpayers, and the British economy. Audience questions highlight real-world concerns, while the panel offers a candid, sometimes critical, exploration of policy, politics, and practical outcomes.

Key Discussion Points & Insights

1. Market Reaction and Political Calculation

• Markets' Reaction: The panel broadly agrees that markets offered a muted response to the Budget, largely giving Chancellor Rachel Reeves the “benefit of the doubt” thanks to a more dovish outlook from the US Fed and some deft debt management (see cancellation of long-dated gilt issuances).

  • Helen Thomas: “The market [is] giving her the benefit of the doubt because... the market now seeing potentially more rate cuts out of the US is sort of in a slightly more benign mood.” (04:02)
  • John Stepek: “People get a little bit too excited about the gilts market these days because of what happened with Liz Truss... What has happened now is the gilts market is much more stable. Also the debt management office is managing the issuance much more.” (05:10)

• Political Calculations vs. Fiscal Reality: A core theme is the backloading of fiscal consolidation — “the pain” delayed until after the next election, with heavy reliance on financial markets staying cooperative.

  • Helen Thomas: “Borrowing is higher and the fiscal consolidation comes later... a pretty toxic mix if anyone thinks they’re going to do fiscal consolidation in the year before a scheduled election.” (04:39)

2. Inflation, Minimum Wage, and Cost of Living

• Inflationary Risks: The Budget introduces some inflationary measures, notably a significant rise in the minimum wage.

  • John Stepek: “Putting the minimum wage up by 4.1% is... an inflationary measure... The Bank of England itself said... one of the reasons food prices have gone up isn't because global food prices are higher. It's because the kind of labor costs are having to get passed on by the supermarkets, which are extremely low margin businesses.” (06:31)

• Implications for Young People: Fiscal drag (i.e., freezing income tax thresholds while wages rise) is highlighted as especially punishing for young and high-earning individuals, particularly alongside new rules on student loans.

  • Merryn Somerset Webb: “You will see increasingly young people hitting this level where their marginal rate of income tax is 51% really remarkably early. And this seems to me to be one of the not particularly discussed problems in this budget.” (18:42)

3. Lost Opportunities and Lack of Reform

• A Tepid, Cautious Budget: Panelists are clear that the Budget misses numerous opportunities for bold reform or signals of seriousness on public finances.

  • Stephanie Flanders: “It’s hard to find things good to say... you certainly haven’t seen a step change in the quality of macro decision making or a government taking advantage of the fact that it had a full term ahead and a large majority. They could have... done some front loaded fiscal consolidation... It could have been 20 [basis points off gilt yields].” (07:40-09:40)

• Signals to Investors: No significant pro-investment tax changes; the small stamp duty changes on IPOs are dubbed “very limp.”

  • John Stepek: “If you IPO, there’s no stamp duty on trading the shares for three years... the reason people don’t IPO in the UK is because they’re not going to get a good enough price.” (16:47)

4. Welfare and Taxation: Perpetuating Imbalances

• Welfare vs. Income Tax: The panel laments the near-parity between the welfare bill and income tax receipts, a signal that is seen as harmful for young, working taxpayers.

  • Merryn Somerset Webb: “The total welfare bill is remarkably similar to the total income tax bill... pretty much every pound I pay in income tax is going one way or another into the welfare bill. And that's a terrible signal to send to our young people.” (11:11)

• Reforms That Didn't Happen: The audience and panel press for stronger welfare reform and bemoan the lack of progress.

  • Helen Thomas: “This tussle over welfare turned into a totemic debate about the two child benefit cap, and now it’s rolled into shirkers versus strivers, which is surely not what the government wanted.” (13:10)

5. Hidden Positives and Quiet Progress

• Infrastructure and Planning: The government is praised for behind-the-scenes action to unlock infrastructure and housing developments (reducing barriers for nuclear projects, amending planning laws).

  • Stephanie Flanders: “What’s ironic about this government is all the good stuff they’re doing is the stuff they’re really trying to hide… there has been quite a lot of active involvement... to make it easier to do big infrastructure.” (14:43)

• Long-Needed Moves: The (eventual) shift of green levies from electricity bills to general taxation is noted as an overdue improvement. (16:15)

6. Controversies and Open Questions

• Mansion Tax Practicalities: Divided views on whether a proposed mansion tax will ever actually be implemented, citing logistical and political hurdles.

  • Helen Thomas: “I would think it’s broadly extremely popular with Labour MPs... So actually that I would put on the could get passed absolutely easily.” (25:37)
  • John Stepek: “The problem is the logistics are quite serious... and the tax itself reduces the value of the house.” (26:06)

• ISA & Savings Policy: Critique over the half-hearted reform to ISAs (capping cash allocation except for over-65s), with widespread agreement that the measure is over complicated and undermined by special-interest lobbying.

  • John Stepek: “Rather than being able to stick it all in cash, you’ll only be able to stick 12,000 in cash unless you’re an old person... It’s almost like they can’t do anything without just adding a little clock.” (28:36)

• Salary Sacrifice Reform: The deferral until 2029 is seen as a sign of policy ducking and acknowledgement of its complexity.

  • John Stepek: “I find most interesting is the fact it’s not coming in until April 2029... by even just by signaling she’s going to do it, everyone who was using it is going to have to go back and have a chat with her employer.” (31:37)

7. Audience Q&A – Real-World Worries and Macro Perspective

Notable Questions & Responses

• Has the Budget given any reason for high-net-worth individuals to stay in the UK?

  • John Stepek: “No. Pretty straightforward. Don’t think so.” (36:08)
  • Stephanie Flanders: Notes failure to address glaring issues with inheritance tax for expats or unwind non-dom changes. (36:22)

• Are we back to the 1970s? Stagnation and leadership speculation

  • Helen Thomas: “I think, you know, history rhymes, doesn’t repeat, does it?... We are in a greatly volatile world.” (38:14)
  • Stephanie Flanders: “If you look at the dynamic in the Labour Party currently, there is something that feels a bit reminiscent of that whole period... You could imagine a leadership battle at some point.” (39:21)

• Why no housing market reform, given the speculation?

  • John Stepek: No real surprise, as “they’re not going to want to do anything that makes house prices go down… the mansion tax is obviously just a sop to the left.” (41:07)

• Why not focus on pensions and investment instead of gimmicky tax-free saving caps?

  • John Stepek: “It’s a sort to the idea that they support investment but everything that they're doing in the tax system pushes against that. The tax on savings, interest, property... We've got lots of measures, dividend taxes...” (42:53)

• One major pre-budget wish as Chancellor?

  • Panel (Helen & Merryn): “Cut welfare spending.” (46:55)
  • John Stepek: Floating idea of a land value tax, but shot down by others as unpopular. (47:07)
  • Merryn: “The full abolition of stamp duty on equity trading… not a big money thing, huge signal to the rest of the world...” (47:25)

8. Other Memorable Moments & Quotes

• On Budget Complexity

  • John Stepek: “If we spent more time focusing on making the tax system simpler... that’s not going to happen.” (43:43)

• On Young High Earners

  • Helen Thomas: “You do a smorgasbord rather than be brave and do the big income tax rise on everybody that you then end up hitting... young people.” (19:27)

• On Incrementalism

  • Helen Thomas: “It's government by committee... sitting around a table saying, okay, we’re gonna definitely do this measure, oh no, but hang on, what about this interest? ... And that’s what’s been going on, which is why it’s been leaky torture process.” (29:58)

Notable Quotes with Timestamps

• “Borrowing is higher and the fiscal consolidation comes later. That is a pretty toxic mix...”
  —Helen Thomas, (04:39)

• “If you don’t think fiscal drag is putting up income tax on people, and I don't know what to tell you... it is about politicians being afraid to tell people hard things.”
  —John Stepek, (17:19)

• “It’s hard to find things good to say... you certainly haven’t seen a step change in the quality of macro decision making...”
  —Stephanie Flanders, (07:40)

• “Pretty much every pound I pay in income tax is going one way or another into the welfare bill. And that's a terrible signal to send to our young people.”
  —Merryn Somerset Webb, (11:11)

• “The mansion tax is obviously just a sop to the left. It may or may not happen. The real problem is... the inability to get houses being built.”
  —John Stepek, (41:07)

• “I find most interesting is the fact it’s not coming in until April 2029.”
  —John Stepek, (31:37)

Key Timestamps for Important Segments

• Live audience poll & intro: 03:12–03:32
• Markets’ reaction, politics, and fiscal timing: 04:01–06:49
• Welfare, tax, and impact on young people: 11:11–14:12
• Hidden positives (infrastructure, green levies): 14:43–16:36
• Mansion tax debate: 25:15–28:09
• ISAs and savings policy critique: 28:09–31:14
• Audience Q&A (migration, 1970s comparisons, high net-worth tax flight): 35:37–46:27
• What they wish the Budget had done: 46:39–47:55

Tone & Atmosphere

The episode was candid and forthright, with the panel often sharing frustration at missed policy opportunities and a tone ranging from wry amusement to faint exasperation. Attempts at positivity were largely drowned by realism—“brave effort, Helen, brave effort.” (14:12) — but the audience engagement, and some hopeful notes on hidden infrastructure wins, provided brief glimmers.

Summary for Listeners

This in-depth Budget post-mortem offers both market-savvy and policy-skeptical perspectives for anyone seeking to understand how the 2025 Budget will affect taxpayers, investors, and the British economy. If you want to know what the experts really think — behind the headlines and official spin — this is required listening (or reading).

Panelists:

• Merryn Somerset Webb (host)
• Stephanie Flanders
• Helen Thomas
• John Stepek

Production: Bloomberg, Live from London